Budgets – Germantown Voice

BMA in Brief – June 24, 2019

To help you stay informed we will do our best to provide high level summaries for the bi-monthly Board of Mayor and Aldermen (BMA) meetings. These summaries will be fact based with a focus on key items covered in the meetings and summaries of the votes taken. Where needed we will cover important discussions individually.

The supporting documents provided to the alderman can be found by clicking here.

The video for this meeting can be found on YouTube by clicking here. Technical difficulties resulted in the YouTube video cutting off shortly after the FY20 budget discussion was completed. The full stream of this meeting can be watched on the city’s web page by following this link. The meeting run time was 2 hours and 57 minutes.

In executive session the agenda was amended to move items a. and j. to the regular agenda. Item 20 was moved to the preliminary agenda.

6. Citizens to be Heard (15:04) – Three citizens came forward to address the board. One on the recent flood and the potential purchase of Germantown Country Club, one on Germantown Helps and the final was a representative from Sen. Brian Kelsey’s office speaking to his efforts to get flood assistance from the State.

9. Beer Board (30:21) – Permit to allow sale of beer for on-premise consumption at Tandem Restaurant. Approved (5-0)

10. Warrant – Thornwood Phase 5 (Moondance patio) (34:00) – The proposal is for a warrant to allow Moondance to install a four season patio on the south east side of their restaurant in the Thornwood development. This area was previously approved for a pergola covered seating area. The proposed patio would be heated and air conditioned and allow for open air dining when temperatures permit. The warrant was Approved (3-2).

11. Ordinance 2019-10 Rezoning 15 Acres Fulmer Property – Second Reading and Public hearing (38:45) – In the public hearing two citizens spoke of concerns with the proposed office development being adjacent to residential neighborhoods. The concept plan for the zoning approval includes three medical office buildings. The developer answered questions from the aldermen and continued to work with neighbors to address concerns. The second reading Passed (5-0)

12. Contract Professional Services Agreement Fire Station No 3. (1:04:24) – This is approval for a contract with A2H for initial design services for the replacement of the 42 year old Fire Station No. 3 on Farmington Blvd. The $117,852 contract will cover work to identify potential locations and design costs for the replacement station. The contract was Approved (5-0)

13. Ordinance 2019-1 – Ordinance to Adopt FY20 Budget – Third Reading (1:07:39) – The board reviewed the FY20 budget. Salaries were discussed including the Personnel Advisory Commission’s recommendation of a 3% market adjustment to salaries. While the budget did not include a raise for the city administrator, Alderman Sanders moved that the salary of the city administrator not be changed without a majority vote of the board. The motion also capped the Police Chief’s salary increase at 3%. That motion was approved. A second motion by Alderman Sanders was made to cap the director level positions increase at 3%. That motion failed. Alderman Massey expressed desire to have someone make to increase funding for drainage programs but never made the motion himself. Following extensive discussion. Approved (4-1)

14. Ordinance 2019-2 – Year End Budget Adjustments – Third Reading – This ordinance makes the final adjustments needed to close out the city’s FY19 Budget. The detailed list of adjustments can be found in the above link to the Alderman’s Packets. Approved (5-0)

15. Ordinance 2019-3 Real and Personal Property Taxes – Third Reading – This ordinance establishes the property tax rate for the city for FY20. The rate is unchanged from FY19 and remains $1.95. Approved (4-1)

16. Ordinance 2019-4 GMSD Year End Budget Adjustments – Third Reading – The detailed list of budget adjustments proposed to close out the FY19 Budget. The detail list is included in the supporting documents in the link above. These adjustments have been approved by the GMSD Board of Education. Approved (5-0)

17. 19R01 – Resolution on Revenues – This resolution establishes rates, fines and fees for enterprise and special revenue funds. Approved (5-0)

18. 19R02 Resolution Capital Improvements Program – Section one of the resolution identifies funding sources for projects and section two identifies the proposed projects. There was some discussion about spending allocation to drainage projects. Approved (4-1)

19. Contract Extension no. 2 Library Services – The extension of a 2015 agreement with LSS. Administration proposed executing a one year option (one of three one year extensions for this contract). There was no discussion. Approved (5-0)

20. Agreement – Parliamentarian – Following a six month trial period of with the Parliamentarian (Dr. Schultz) a one year contract was proposed. The hourly rate is $150/hour with a limit of $10K per year with three one year extension options. Approved (3-2)

21. Purchase – Repair to Wells No. 2 & 6 Johnson Rd. Plant, High Service Pump no. 3 – Durring annual inspection processes these three pumps were designated to be pulled for inspections. During those inspections it was determined that maintenance was needed. Three pumps were pulled one pump was approved for repair however, the vendor proceeded to repair all three wells/pumps which exceeded approval thresholds for this work. Immediately work was stopped and the approval brought before the board. Approved (3-2)

22. Preliminary Agenda – The amended preliminary agenda was summarized, motioned and seconded. There was no discussion. Approved (5-0)

BMA in Brief June 10, 2019

The agenda packets provided to the Aldermen can be found by clicking here.

The full video of the meeting can be found on YouTube by clicking here.

Flood Update from Germantown Fire Department Chief John Selberg. (6:30)

6. Citizens to be Heard (15:52) – There were a total of seven citizens that stepped up to speak. One spoke on sales tax, five spoke about the flood and one spoke about the flood and lack of cell coverage in the affected area.

9. Preliminary Agenda (41:40) – Alderman Massey proposed moving items b. and c. to the regular agenda. Both failed and the the preliminary agenda was approved as proposed. The preliminary agenda was Approved (4-1)

10. Ordinance 2019-1 Adoption of FY2020 Budget Second Reading and Public Hearing (44:03) – The Chairman of the Financial Advisory Commission (FAC) read a short statement into the record to document the work done by this group in helping to oversee the development of the FY20 budget. In the public hearing one member of the Financial Advisory Commission came forward to discuss the Germantown Country Club. Approved (4-1)

11. Ordinance 2019-2 Year End Budget Adjustments Second Reading and Public Hearing (2:03:34) – The public hearing did not have anyone from the community come forward to make statements on this item. An extensive list of adjustments was presented to account for changes during the year. The detailed list can be reviewed by in the Aldermen’s packets. When reviewing this list note that the changes is the total in the “Proposed Adjustment” column of the document. Approved (5-0)

12. Ordinance 2019-3 Real and Personal Property Taxes Second Reading and Public Hearing (2:17:23) – The public hearing did not have anyone from the community come forward to make a statement on this item. This Ordinance sets the 2020 tax rate at $1.95, no change from the FY19 rate. Approved (4-1)

13. Ordinance 2019-4 GMSD Year-End Budget Adjustments – Second Reading and Public Hearing (2:20:17) – The public hearing did not have anyone from the community come forward to make a statement on this item. A list of the pr Approved (5-0)

14. Ordinance 2019-12 Amendment to Fire Prevention Ordinance Chapter 10 First Reading (2:22:53) – The ordinance to adopt a new fire code based on the 2015 international fire code. The state of TN currently uses the 2012 international fire code. The proposed code added requirements for sprinklers on dead end streets over 750 feet. There are also additional items to address safety of food trucks. It includes the ability for the BMA to establish a board of appeals for rulings of the Fire Marshal. Approved (5-0)

15. Ordinance 2019-12 Amendment to Fire Prevention Ordinance Chapter 10 – Residential Sprinklers – First Reading (2:29:27) – This item supports the adoption of the 2015 fire code. The code requires sprinklers for new homes over 5,000 square feet vs. the current requirement of 7,500 square feet. It would require sprinkler systems in zero lot line homes with distances of less than 20 feet between homes. Approved (5-0)

16.Ordinance 2019-13 – Amendment to Subdivision Ordinance Chapter 17 Section 17-56 (Streets) First Reading (2:34:32) – This amendment brings the subdivision ordinance in line with the requirements laid out in the fire ordinances above. That includes requirements for cul-de-sac diameters as well as dead end street restrictions. Approved (5-0)

BMA in Brief May 13, 2019

The supporting documents provided to the Alderman for this meeting can be found by clicking here.

A video of the full meeting can be viewed on YouTube by clicking here.

Budget Work Session 5/8/19: In preparation for the proposal of the FY20 Budget a public work session was held on 5/8/19. The budget was reviewed in about an hour and twenty minutes. All of the department heads were present to answer questions however, there were only a few. Those questions included the impact of the $2.5M grant to GPAC and questions about expense in the special revenue drug fund. The City Administrator identified budget amendments that will need to be made based on the GPAC grant and FAC recommendation for school security funding.

6. Citizens to Be Heard – (7:51) Two spoke in favor of GCC Purchase. Fourteen residents spoke against the cell phone tower citing health, environmental and property value impacts, one person spoke in favor of the cell phone tower.

Note: Alderman Massey was not present for the Executive Session or BMA meeting. No notice was given as to the reason for the absence.

9. Preliminary Agenda – (1:20:21) Reviewed in executive session and questions were asked and answered. No adjustments were made or proposed and the Preliminary Agenda was approved (4-0)

10. Contract – Germantown Athletic Club Renovations Phase IV – (1:22:10) Phase IV is the addition of a Mezzanine and sitting area for a cafe. It will include a rework of the entry and check in desk. There will be additional activity space in the lower level. The funds for these improvements come from the dues generated by members and not from tax revenues. This phase totals $1,412,493. Passed (4-0)

11. Supplement No. 6 – Germantown Athletic Club Renovations Phase IV CEI – (1:29:29) This item is for the approval of the contract administration and construction inspections. This fee is $29,500 for Phase IV and brings the total for all the phases of this project to $415,000. Passed (4-0)

12. Ordinance No. 2019-1 – Ordinance to Adopt the FY20 Budget – First Reading – (1:32:14) The proposed budget is for $58.9M for the General fund and $22.5M of Capital improvements. The proposed budget does not include any impacts for the potential purchase of the Germantown Country Club. The purchase impact is unknown and would be added as an amendment when additional details would be finalized. A fifteen page summary of the budget is presented as the Ordinance which can be found by clicking here. Monday, June 10, 2019 will be set as the public hearing for the budget. Amendments to the budget were made based on the feedback for the FAC related to school security. The funds will be targeted via grants and if not successful the FAC recommends provided funds in the FY21 budget to pay in July 2020 to meet security upgrades. Additional amendments were made to funding related to GPAC to account for the $2.5M grant from the state of Tennessee. Passed (4-0)

13. Ordinance No. 2019-2 – Year-End Budget Adjustments – First Reading – (2:18:25) An extensive list of adjustments was presented to account for changes during the year. The detailed list can be reviewed by clicking here. When reviewing this list note that the changes is the total in the “Proposed Adjustment” column of the document. Second reading and public hearing will be held on June 10, 2019. Passed (4-0)

14. Ordinance No. 2019-3 – Real and Personal Property Taxes – First Reading – (2:33:08) This Ordinance sets the 2020 tax rate at $1.95, no change from the FY19 rate. A second reading and public hearing will be held on June 10, 2019. Passed (4-0)

15. Ordinance No. 2019-4 – Germantown Municipal School District Year-End Budget Adjustments – First Reading – (2:35:12) Similar to the BMA, GMSD must amend their budget for actual spending that hits throughout the year. A 31 page summary of the changes can be found by clicking here. A second reading and public hearing will be held on June 10, 2019. Passed (4-0)

16. Ordinance No. 2019-10 – Rezoning of a 15.229 Acre Portion of the Fulmer Property (South Side of Wolf River Blvd.) from “R” to “O” Office Zoning – First Reading – (2:38:30) This item is the rezoning of 15 acres of the 190 of the land known as Fulmer Farms. The section of land in question borders Wolf River Parkway with the Vineyard subdivision on the western border. The purpose of the proposed property is for medical office space which is consistent with the use of other land along this section of Wolf River. Concept site plans can be reviewed by clicking here. A second reading and public hearing will be held on June 10, 2019. Passed (4-0)

BMA in Brief – January 14, 2019

Mayor Mike Palazzolo welcomed new City Attorney Mac McCarroll and new Alderman Scott Sanders to the board.

During the Executive Session, changes were made to the agenda. Beer Board item 9.a. was pulled by request of the applicant. On Consent Agenda, two items were pulled from Consent. 10.d will become item 11 and 10.e will become item 19.

9. Beer Board – Poplar Food Mart #1 approved for off-premise use and Rock N Roll Sushi approved for on-premise use.

10. Consent Agenda -approved as amended.

11. Professional Services Agreement Supplement No.2 – Final Closeout Right-of-Way Appraisals – Wolf River Boulevard/Germantown Rd. Intersection Improvements Project – Approved 4-1

12. Change Order No. 2 – Forest Hill-Irene Road Improvements – Requested increase of $37,631.33 (total project is $6.15M) for increased cost estimates for fiber optic lines needed for traffic signal connectivity and coordination and culvert replacement under the road near the school site. Original plan was to add on to the existing culvert however there were cracks and open joints that necessitated the full replacement of the culvert. – Approved 5-0

13. Election of Vice Mayor – Mary Anne Gibson selected 5-0

14. Grant – Leadership Germantown – Request for approval of budgeted grant of $13,600 for Leadership Germantown – Approved 4-1

15. Purchase – Fire Engine – Request for $859,539 to purchase a new custom fire engine. The purchase will allow F139 (Engine 93) to be placed in reserve. F139 is 28 years old and typical life span for this type of equipment is 15 years front line and 5 years reserve. Approved 5-0

16. Resolution 19R03 – Banking and Signature Cards. Approved 5-0

17. Ordinance 2019-5 – Amendment to Zoning Ordinance Chapter 23 – SmartCode: Site Standards 1st Reading – The proposed change clarifies language in the code about the width of curb cuts. This change is needed to insure fire equipment can safely access properties. Approved 5-0

18. Ordinance 2019-6 – Amendment to Zoning Ordinance Chapter 23 – Wireless Transmission Facility 1st Reading – Change in wording to allow for stream lined approval of equipment upgrades on existing facilities and establishment of policies and procedures for placement of small cell wireless facilities in public right-of-ways as a result of changes to state law. This item generated discussion on how state law may allow many small cell towers all over the City of Germantown. Approved 4-1

19. Professional Services Agreement Supplement No. 4 – Wolf River Boulevard/Germantown Rd. Intersection Improvements Project. Approved 4-1

Germantown Road Realignment?… DOA until 2023

Almost a year ago, Germantown Voice began blogging as a way to engage in political conversations. Our first blog was about the Germantown Road Realignment Project.

This topic continues to pop up, usually as a part of an argument that the “current administration” doesn’t listen to citizen input. Even as late as October last year, there were social media posts saying the Germantown Road realignment project wasn’t dead.

Officially, it is dead until at least 2023. Why 2023? This is where it gets a little complicated. Every 3-5 years the city submits a list of proposed projects to the MPO (Metropolitan Planning Organization). The MPO is the organization that prioritizes Local State and Federal funding for road and transportation projects in the Memphis Metro area. See the map below for the area covered by the MPO.

The list submitted this year is for projects between October 2019 and September 2023. The prior list was submitted to the MPO in 2013 and that was the list that included the Germantown Road Realignment project and McVay Road Realignment, both of which were not pursued due to community feedback. This year is the first opportunity for the city to submit their new list of priorities for funding of major road projects. Noticeably absent from the list is the Germantown Road Realignment. This is even after claims that last year’s resolution to kill the project were potentially just election year placations.

The time frame for MPO requests is long range due to the long range nature of projects. In many cases, it can take years for design, review, Right of Way acquisition and construction. These projects are important to the city as the majority of them are funded primarily or even wholly with State and Federal funds. In other words, these projects don’t impact your property tax rate.

Road projects are paid for a couple of different ways. First, is the paving of residential streets. The city pays for that as part of the Public Works budgets, roughly $2,000,000 a year. Next, is the work on major roads. These projects are funded with combinations of Local, State and Federal funds. This is where the MPO comes in to play.

When I saw the list of projects I had several questions about the priority of the funding and the MPO process. I sat down with City Engineer Tim Gwaltney last week to discuss the list and how the MPO works.

The MPO funds come from 3 to 5 main buckets. Traditionally, it has funded projects under three main categories, Bridges, Paving and Signalization. Germantown usually sees at least one of each of these types of projects funded. For example, even though the new traffic light at Houston High School is number six on the list it is the highest prioritized signalization project on the City’s list so it is likely to be funded. There are two new categories this year with funding for Safety Improvements and Plans & Studies. The prioritized list is below:

Wolf River Blvd Mill/Overlay from Riverdale to Western City Limits $2.0M (80% Federal)
Forest Hill-Irene Safety Improvements Poplar to Wolf River Blvd $5.0M (80% Federal)
Poplar Culvert Replacements – Phase 5 $550K (100% Federal)
Update City Major Roads Plan $200K (80% Federal)
Intersection Safety Audits $200K (80% Federal)
Signalization Wolf River Blvd @ Houston High $500K (100% Federal)
Signal Upgrades $2.5M (100% Federal)
Neshoba Road Mill/Overlay from Germantown Rd to Exeter $1.5M (80% Federal)
McVay Road Bridge Replacement (just north of McVay and Messick) $600K (80% Federal)

The city will not get official word on which projects are approved by the MPO until near the end of the budgeting process for the city. We will keep an eye on the process and let you know what gets approved from the MPO as soon as we find out. You can find out more detail about each of these projects by following the link below.

https://gtown.maps.arcgis.com/apps/MapSeries/index.html?appid=c75ea4248dc44953b9dcc2287f85670a

For even more information on the City of Germantown’s Transportation Improvement Program funding requests for 2020 to 2023, please attend the public meeting January 9 from 5:30 to 6:30 p.m. at the Economic and Community Development Building, 1920 South Germantown Road. Learn more here.

BMA in Brief — December 10, 2018

No items on the consent agenda were moved to the regular agenda during the Executive Meeting prior to the BMA. For those unfamiliar with the consent agenda, it is a mechanism for approving routine business that doesn’t necessarily need to be addressed individually by the entire board.

Below our summary is a link to a video of the entire BMA meeting for your review. We have provided approximate start times for each item.

Citizens to be Heard (begins at approximately 8:15)

Four citizens thanked Alderman Barzizza for his years of service.
One citizen expressed concerns about the GPAC Grove costs.

9. Consent Agenda as listed on the agenda was approved. (begins at approximately 16:33)

Contract – GPAC (Germantown Performing Arts Center) Grove Outdoor Venue (begins approximately 17:55)

GPAC Executive Director Paul Chandler gave an extensive presentation explaining the design and purpose of the Grove Outdoor venue. The Grove will be a park-like setting with a casual atmosphere. Mr. Chandler described it as a community gathering place for family and friends and an outdoor reflection of the indoor space.

Additionally, there will be a 32-foot-wide high definition video wall at the back of the stage and will allow a simulcast of events inside the venue and events from across the world. GPAC will be the third venue in the United States with such an arrangement. GPAC has raised $2.5M amount toward the $5M project.

Two GPAC Board members spoke in favor of the project. (Begins approximately 29:50)

Discussion began at approximately 36:58 and the contract was approved by a 4-1 vote.

Be always sure you are right, then go ahead!

I was recently listening to an audio book and the author cited one of his favorite quotes as being from Davy Crockett. Crockett, the famous Tennessean who served in Congress and lost his life in the battle at the Alamo was known for saying “Be always sure you are right, then go ahead!” I have heard that before but it really stuck with me this time.

We are in a political environment that is full of contradicting information and some flat out lies. It is incumbent on us as voters to wade through all this information and try to discern what is truth. We at the Germantown Voice are working together to lay out some of the key items we see as hot button issues either called out by candidates themselves or championed on social media.

First and foremost, we recommend watching the Germantown Chamber of Commerce Candidate Forum. At nearly two hours it is long but it is worth your time to be an informed voter. The program begins with the Alderman and then transitions to interviews with each of the Mayoral candidates. Be open minded and listen to both candidates.

Listening to Citizens – There is a narrative that says that certain candidates are not listening to citizens. Have you reached out to your officials directly? You might find they are very responsive. Did you know that the long term plans you hear referenced (including Forward 2020 & 2030) are all citizen led? Those plans were not just a handful of people either: they included over 1,000 participants in task forces and public meetings. The commissions that approve initial concepts for projects are all citizen led. All these meetings are open to the public, many are available on YouTube though the Germantown Municipal Television page.

Development – In general, there is a perception that the city is “pushing” development. Let’s be clear – the city doesn’t solicit development. If you listen to this YouTube video taken from the public hearing on the rezoning of the Cordova Triangle, you can hear the property owner clearly state that developers are approaching them with projects. They continue to approach the land owners even with the moratorium in place. Development is happening because land owners and developers see value in Germantown. Can you blame them? Look at the success of Trader Joe’s and Whole Foods. Check out the lines at Rise and the new Apple store. So be careful when someone tells you the Mayor and Aldermen are pushing development. Be sure you understand where the demand comes from. The Commission, Mayor and Aldermen are all performing their roles as checks and balances to the system to be sure proposals meet zoning, codes and overall vision of the city. There is a lot to discuss about the value of being sure we grow the right way and we will add to that conversation.

Smart Growth – This concept is limited to very specific areas of the city. The intention is to maximize the property tax and sales tax generation for these targeted areas like the central business district (think Poplar and Germantown Rd) and the Western Gateway (think Poplar and Kirby). These areas are already commercial but, in many cases have 40+ year old retail space in need of updating. The intent is to make sure those updates help generate more tax revenue thus reducing the dependence on residential property tax. Did you know that the taxable property on the 9.7 acres of Travure will be valued well over $30m when done? You would have to develop nearly 100 homes on 1/4 acre lots valued at $500k to generate the same tax revenue. And my estimates of value are likely very low. The incomplete office building was assessed at $10m in FY18 and the hotel will be worth north of $15m when complete. There is a whole other parcel to be developed as well. That also doesn’t include any sales or hotel taxes generated there.

Apartments – We have all seen plenty on this topic. There are TV ads claiming that 1,200 apartments have been added to our “Fair City.” That is false any way you look at it. As of today, the only fully approved and under construction apartments are Thornwood with 276 units. Thornwood is the first new apartment complex in Germantown in nearly 20 years. You may see a map of developments around the city that cite other projects in the approval process but it is important to know the facts about each of these.

Watermark was voted down 4-1 by the BMA (284 Units). However, the developer is suing the city.
Viridian (310 units) is concept phase only and requires additional reviews with the planning commission and BMA approval. This project has not moved forward at all (despite what you may read in come social media groups) and will get tremendous scrutiny when it does.
Arthur Property (Saddle Creek 265 units) is approved in concept phase only.
Parc (371 Units) withdrawn by applicant, not under consideration.

Portables – The fact is that the new elementary school will address all of our capacity needs at the elementary level. Depending on transition plans with the new school, portables could be gone as early as next year. Any candidate that tells you they will do it faster should probably run for school board as they don’t have the authority to change zoning or enrollment plans that would be necessary to facilitate that change. The city has been working with the GMSD Board of Education to address this problem since day one. Twenty-five portables were removed at Riverdale and the remainder will be gone from Farmington and Dogwood within the year.

Taxes – Claims of 45% increases over the last 4 years are just wrong and frankly out of context. By their math your tax rates are actual down since 1990 when the rate was $2.16. Do you pay more taxes than you did in 1990?Of course you do, that is why context matters.

Read our series on Tax Rate Truth (Part 1, Part 2, Part 3, Part 4)for full details about what the increase really is and the story around why your taxes have gone up. In the last 4 years, we have added a brand new school system, helped address deferred maintenance of the all schools ($26M reduced to $11M), added a police district, seen our fire department upgraded to ISO Class One and invested in our parks and greenways. We get tremendous value for our dollars as our rates are less than half that of Memphis and our services and amenities the best in the region.

“Hold the Line on Taxes” – The annual budget process includes a 5-year projection that helps anticipate the timing of potential tax rate increases. This year the City Administrator projected we should get at 5 more years out of our current rate meaning that whomever is mayor will likely not have to raise taxes in the next term. Listen to it here.

Growth of City Staff – Did you know that in 2000 the city had 400 full time employees? In FY19, we now have 406, including 40 additional first responders. This illustrates the gains in efficiency in running city operations while shifting resources to important areas like fire and police.

Streetscape – You may have seen plans float around for Streetscape work on Exeter. This like many other issues is intended to be a wedge issue that divides the community. This issue was so misrepresented that the city had to issue a statement to clarify the status of the streetscape project. Read the truth here, straight from the city of Germantown. This project is not actively being worked and will require significant community input before anything is approved.

Carrefour – This property was built in 1973 and has had two major remodels over the years. The developer is seeking to rework this property in three phases. If you listen to the candidate forums it appears that nearly everyone agrees that that property needs to be remodeled, even John Barzizza doesn’t seem against the idea of apartments being included as part of this project. He clearly points out that this is different than a stand-alone complex off Winchester (Listen Here). By the way, there are no fully approved projects off Winchester despite his statement.

Cell Phone Coverage – This is another attempt to create a wedge issue. Did you know the laws regarding cell towers in Germantown have been changed already? Did you know the city does not own cell towers? The carriers and their partners own them. The City has approved a new tower on the Wolf River Greenline, another at Madonna Learning Center on Poplar, added cell boosters to the schools and increased the allowable height of towers, all to improve coverage in Germantown. Now the carriers need to make their investments, or would you like your tax dollars to subsidize their profits?

Blogs – Like the Germantown Voice, Shining a Light is an opinion blog. It presents some factual information that supports a point of view. Our blog does the same. We try to offer perspective to the community. We don’t all have time to watch BMA meetings or attend commissions, but wouldn’t it be great if we did? Read a diverse perspective but keep in mind that stories can pick and choose what they include. That is why we recommend listening to the Candidate Forum above. You can hear directly from the candidates, side by side answering the same questions.

Social Media Leadership – Is your expectation that elected officials monitor social media and seek out to engage in every post? That would literally be a full-time job. Yes, major issues on social media do get the attention of your officials but usually because someone contacts them directly to start the discussion. Leading via social media is one step away from mob rule as often times the loudest voices may not represent the majority.

Germantown Bulletin Board – Did you know that the group that administers this Board, which reaches 13,000 people, is made up of open supporters of John Barzizza’s “Team?” One admin is also campaign manager for a school board candidate (Brian Curry), and is campaign manager or has done campaign work for two alderman candidates (Scott Sanders and Jeff Brown) and Mayoral candidate John Barzizza? To our knowledge there is no political diversity among this group. That matters because they approve all the new posts and moderate discussion. Originally political discussion was not permitted on that forum, now it doesn’t take long for any topic to turn political. Just something to keep in mind when reading posts in that group.

We will close with this final and appropriate quote from Davy Crockett: “I am at liberty to vote as my conscience and judgment dictates to be right.”

Correction 12/18/18: A previous version of this article stated that Brian Curry and Angela Griffith employed the same campaign manager. This evening Mrs. Griffith informed me that she did not use the same campaign manager referred to above. Apologies to Mrs. Griffith for the misunderstanding. The mistake stems from the fact that her financial disclosures indicate she purchased her campaign sings through Mr. Curry’s campaign manager.

Tax Rate Truth – Part 4: Reserve Funds

It is vital that we maintain the healthy reserves that keep our community fiscally secure. Alderman Massey refers to these as “profits” in his discussions on the topics; however, it is more accurate to think of them as savings accounts. In the next to last reading of the budget Alderman Massey (seconded by Alderman Barzizza) proposed a property tax cut (discussed in this blog). Their proposed cuts remove the funding that goes into our reserve balances and potentially require the draw down of those reserves.

Reserves are built over time with the knowledge that there are significant investments in infrastructure that are needed to maintain a city like Germantown. This is something the city has done very well over the last 20 years. Responsible fiscal management has lead to award winning budgeting processes and allowed our city to not just grow but thrive. This firm financial base is the foundation for our best in class city services like our Fire and Police. They don’t come cheap and require investment to maintain those levels long term, along with our schools and quality of life amenities like GPAC, Library and Parks.

Let’s look at a real world example. The city will likely need a new fire station in the not too distant future. This is something that is in the city plan and part of the strategy for building reserves. We as a community could pay for this one of two ways. We could build reserves and pay for most of it as the expense is incurred or we could borrow money to pay for it. At current rates and a 20 year bond term we would pay $6,476,702 for a $5,000,000 fire station as opposed to paying cash out of our savings.

But the implications of borrowing money go beyond the cost of borrowing money. This is where experienced financial leadership and municipal planning become extremely important. If you borrow money for the fire station you can’t borrow money for other improvements or even maintenance items in the city. Think about all the deferred maintenance that is being addressed for GMSD as they catch up on years of neglect. Like your household, the city has limited borrowing capacity so we need to be wise about what we choose to use the bond funding option for. It doesn’t stop there either. The more you borrow the more reserves you need to maintain your bond rating or the rates for borrowing go up. The other option is that you get a tax increase every time the city has to do a major project. Poor planning puts the city in a “paycheck to paycheck” mentality and increases the likelihood of more frequent tax increases.

The other thing of concern is that if we follow the policy proposed in the last budget meeting it is likely that we would lose our AAA bond rating. This just compounds the fiscal issues by raising the rates at which we borrow money. While this policy may reduce your tax rates in the short term it is very concerning in the long-term impact of raiding the piggy bank for a short-term win. It takes years of disciplined fiscal management to get in our enviable position. Unfortunately, one bad budget can undo all of that work.

Tax Rate Truth – Part 3: Sales Tax Risk

Too much dependency on sales tax leads to a need to raise property taxes when the economy slows down. Improperly tying support of our schools to sales tax revenue also will lead to property tax increases. Here we see a clear example of this in FY14, proof that we need to be careful about how we use our variable revenues. Recent budgets show the City has learned from these lessons and remains conservative in their sales tax revenue projections. What does that mean in layman’s terms? If you are paid on commission for your work, you probably shouldn’t build your household budget for the year on your best month of sales. Alderman Barzizza and Massey both pushed for the last two budgets to include a higher dependency on sales tax revenues.

Hear him in his own words here. Then listen to Patrick Lawton explain the way sales tax is budgeted and why.

Shortfalls in sales tax projections first impact Infrastructure Replacement Programs (IRP) and then Capital Improvement Programs.IRP projects are things like roads, drainage and water main projects that provide services to our city. CIP projects are investments in our future like a fire station, schools or greenway improvements. Being conservative in our estimates allows the city to pay cash as opposed to issuing debt and maintains our fund balances needed to keep our rates low. Click here for more info on the Reserve Balances in Tax Rate Truth – Part 4

The budget doesn’t clearly call out the impact of the sales tax shortages other than showing a 4% shift. High level math says that a 4% shift in the General fund of $43.6 Million would be a $1.7 Million shift into property tax funding. With the FY14 Budgeted Property Tax Revenues of $28 Million that implies that roughly $0.12 of the $0.445 increase is due to Sales Tax short falls.

Keep in mind that the value that you get for that $1.97 (or $1.95 for FY19) tax rate. Our neighbors in Memphis pay $4.05 or over double our rate. Collierville pays $1.83 but they have a much larger dependency on Sales tax with more big box stores like Lowe’s, Home Depot and Walmart. They also see more sales tax revenue from car dealerships and the Carriage Crossing Mall. Collierville’s dependency on sales tax, and shortages this year, resulted in them having to cut positions from their FY19 budget. We don’t want to be in that position.

Tax Rate Truth – Part 2: Do The Math

For over 15 years I have worked in corporate finance. I have made a living telling stories with numbers, helping executive leadership to understand complex investments, operations and projects in as simple terms as possible. It is easy to get turned around by all these numbers, it happens to the best of us. That is why I have worked with my father, a retired Certified Financial Planner, to double and triple check these calculations.

The first step in this process is to look at the FY14 rate and its individual components. As you read this you will find that there are clear economic, legislative and community needs that drove the increases.

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Step two is to account for the impact of the FY18 reassessment impact. The reassessment raised the average value of property in Germantown by 9.7% between FY14 and FY18. That doesn’t mean that every house went up in value by that amount, it is simply the weighted average impact to assessed values of property in Germantown. To keep comply with the Truth in Taxation laws and keep the revenue generated from the city’s property tax rate flat, it was calculated that the rate should go down to $1.76. So all of the items above that used to sum up to a $1.93 tax rate now sum up to $1.76. I will refer to that impact as rate restatement. That means that the base rate in FY14 is no longer $1.485, the impact of the reassessment make that $1.354. The math in the table below shows the breakdown of the FY14 rate in FY18 terms.

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One major part of our concern is that the impact of the FY14 reassessment is lumped into their calculation for the tax increase. In FY14, the decline of property values meant that the rate had to be increased to hold revenues flat (the inverse of what happened in FY18). That is the second of the two lines highlighted in red above. That going forward that number is included in my FY14 base as it is not an assessment impact as opposed to a rate increase.

To accurately state a growth rate you have to have a good starting number. When they use $1.485 as their starting point they are omitting two key factors for accurate analysis, assessment impact and rate restatement. So when you restate the rate it is $1.354 and add back the assessment impact of $0.087 your growth rate should be calculated based on $1.441 in terms of the FY18 tax rate.

The table below shows how you add up the restated components of the FY14 tax rate with the FY18 increases to get the final rate approved by the BMA.

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Now we are in a position to calculate a growth rate. We have a correctly adjusted base number to have a true apples to apples comparison. You can see the components that drive the increase. Please take a moment to understand the importance of the Sales Tax Impact and why we must be conservative in our budgeting of it by reading Part 3 of this blog. It is also important to understand that the FY14 increase was intended to restore reserve balances that had been lowered due to the Great Recession, read more about that in Part 4 of this blog.

Also keep in mind that these rates help fund our schools and 9% points of the total increase of 36.7% directly funds the needs of our new elementary school and Forrest Hill improvements needed to access it. The Hall Tax is a state income tax that was allocated to municipalities and is being phased out. That funding gap needs to be addressed. When you look at the components, it is clear to see your taxes were not frivolously raised for no reason. As stated previously, there are clear economic, legislative and community needs that drove all of these increase. These rates have helped fund deferred maintenance at GMSD, invest in parks, improve the police force and add ambulance service. All these things add to quality of life in Germantown and make it the place to live in Shelby County.

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Keep in mind that the value that you get for that $1.97 (or $1.95 for FY19) tax rate. Our neighbors in Memphis pay $4.05 or over double our rate. Collierville pays $1.83 but they have a much larger dependency on sales tax with more big box stores like Lowe’s, Home Depot and Walmart. They also see more sales tax revenue from car dealerships and the Carriage Crossing Mall. Collierville’s dependency on sales tax, and shortages this year, resulted in them having to cut positions from their FY19 budget. We don’t want to be in that position thus we budget conservatively.